Planet Gore

Thoughts on Keystone XL

One thing lost in the entire Keystone XL debate is that we’re really not talking about an entirely new project. The “XL” portion is the proposed expansion of the original Keystone pipeline that is, much to the amazement of some I would gather, currently operating safely while transporting oil from Canada to the United States.

But safety is only one issue brought up by the Left, the other being the argument over how many jobs the XL portion of the pipeline will create. TransCanada, the owner of the pipeline, is promising 20,000 jobs while a so-called independent study by the Cornell Global Labor Institute states the pipeline will actually destroy more jobs than it creates.

So, we have two estimates. One, from the people trying to get the project built and one from an institution dedicated:

“. . .to help forge international social solidarity based on workers’ rights, environmental protection, needs-based sustainable development, and the extension of economic democracy and popular participation in shaping communities and societies.”

Who is correct? To be honest, I have no idea.

But since Keystone XL is not a new project, we can get an idea for how many jobs it will create by looking at how many jobs were created by the original project. For example, a filing with the South Dakota’s public utility commission said 2,580 jobs were created in South Dakota, with 282 of the jobs as permanent jobs. As for the Left’s focus on most of the jobs being “temporary,” a construction job, by definition, is a temporary job. See page 45 of this PDF file for a detailed breakdown, including a chart that shows Keystone’s original estimates of jobs needed for the project were actually lower than the number of people they did employ.

And in a quote in the Canadian Press, the CEO of TransCanada declared that some 9,000 people worked on original, smaller Keystone project.

Rather than look at either study mentioned above, I think it’s fair to say that, yes, building a pipeline does create jobs, and this doesn’t even include the magical multiplier effect that Team Obama touted for its taxpayer funded infrastructure programs. If Keystone doesn’t create jobs, than President Obama mustn’t have — right?

Keystone is being built without taxpayer money, making the hypocrisy of Team Obama and the Left’s new concern for exact job-growth estimates even more galling.

But jobs really aren’t the important issue. There’s an issue brewing that could derail the pipeline, and it’s an issue conservatives really should be taking a hard look at: eminent domain.

From the New York Times in October:

Randy Thompson, a cattle buyer in Nebraska, was informed that if he did not grant pipeline access to 80 of the 400 acres left to him by his mother along the Platte River, “Keystone will use eminent domain to acquire the easement.” Sue Kelso and her large extended family in Oklahoma were sued in the local district court by TransCanada, the pipeline company, after she and her siblings refused to allow the pipeline to cross their pasture.

“Their land agent told us the very first day she met with us, you either take the money or they’re going to condemn the land,” Mrs. Kelso said. By its own count, the company currently has 34 eminent domain actions against landowners in Texas and an additional 22 in South Dakota.

In addition to enraging those along the proposed pipeline’s 1,700-mile path, the tactics have many people questioning whether a foreign company can pressure landowners without a permit from the State Department — the agency charged with determining whether the project is in the “national interest.” A decision is expected by year’s end on the pipeline, which would carry crude oil from Alberta to American refineries.

A government official with knowledge of the permitting process who would address the issue only on condition of anonymity said, “It is presumptuous for the company to take on eminent domain cases before there is any decision made.”

Landowners have begun joining forces and challenging the company’s assumption that it can legally seize land.

And from Canada’s National Post in November:

But there’s more to the anti-Keystone movement than greens, something that may be more difficult to fight. These are the property-rights defenders who are unhappy with TransCanada’s use of expropriation – under U.S. laws of eminent domain – to take over land to make way for the pipeline.

In Nebraska and South Dakota, where TransCanada is laying new routes for the XL, local landowners are marshalling opposition to eminent domain practices. Eminent domain allows corporations, with state help, to force local landowners to give up control over land. Compensation is paid, but the exercise of eminent domain is a court-challenge process. In recent years, eminent domain trends appear to be moving against allowing corporations the rights they once had.

Eminent domain is also seen – often rightly – as a subsidy to corporations. Such subsidies can be worth millions. The eminent U.S. leftist Alexander Cockburn (no friend of global warming greens) wrote that the Keystone XL “will require one of the largest and most aggressive eminent domains actions since the construction of the Interstate highways.”

That may be going too far. But the practice of eminent domain is under attack across the United States. Alexandra Klass, of the University of Minnesota Law School, writes that recent cases suggest the power to use the law to take over property is under constant reform, especially as it relates to natural resource developments.

A review of eminent domain and property rights reform in the Interior West reveals that while there has not been a frontal attack on natural resource development takings, subtle reforms have taken place. both as a result … of changing economic and social forces in the region. Those reforms can be seen as part of a broader reconsideration of the role of natural resource development in the Interior West, as those states attempt to balance economic development, urban expansion, traditional natural resource development, and preservation of the environment. In adopting recent reforms, state legislatures and courts are readjusting the allocation of property rights in favour of individual property owners to address the present-day needs of their states, just as they adjusted them in favour of natural resource extraction companies to promote that industry over 100 years ago.

Roughly, that means the ability of natural resource enterprises and pipeline firms such as TransCanada to use eminent domain and expropriation is diminishing rapidly. It will not disappear completely. Eminent domain is still a standing part of the U.S. legal system and part of its political culture. But it is going to be more and more difficult. The Keystone XL experience in key states shows that the system is being challenged on a monthly basis. With the delay in approval, the risks mount that TransCanada’s access to eminent domain will have diminished by the time the next review comes up.

The aforementioned New York Times article does say that TransCanada has agreements with some 90 percent of the landholders along the route in Nebraska and TransCanada states in this .pdf fact-sheet:

. . . Keystone XL extends TransCanada’s commitment to treatlandowners with respect and work with them in good faith. That commitment is reflected in the fact thatwe have successfully reached easement agreements with more than 80% of landowners on the route in Texas (as ofFebruary 2011). In addition, we have currently negotiated agreements with almost 93% of landowners who own/control almost 90% of the tracts of land along the entire pipeline route.During our 60-year history of safely meeting American’s energy needs, we have developed positive relationships with morethan 40,000 landowners in North America. We meet face-to-face with landowners to understand their specific needs and addresstheir concerns. We work hard to be a good neighbor.

That’s all well and good, but as we saw with the conservative outrage over the Kelo case, there’s a question whether the government should use its power of eminent domain for a private enterprise. What makes Keystone XL different than Kelo are the national-security concerns which are not only voiced from by the Right. Former NSA adviser Jim Jones and current Democratic governor of Montana Brian Schweitzer have both cited the need for energy resources from an ally as a reason to approve the pipeline.

I’m a supporter of the Keystone extension, I think it will bring jobs to America, but I’m still squishy on the national-security argument that would allow TransCanada to use eminent domain to take land for the route. If TransCanada wants to build the pipeline, they need to do it without eminent domain, at least in my opinion.

And one last important fact to point out to our friends on the Left, Keystone XL is no different than the Alberta Clipper Canada-to-America pipeline approved by President Obama in 2009:

By Executive Order, the State Department has been delegated authority from the president to receive applications for the construction, connection, operation and maintenance of facilities at the borders of the United States, including petroleum pipelines, and to issue or deny Presidential Permits for such facilities upon a National Interest Determination. A Presidential Permit application triggers an environmental review of the proposed project, under applicable environmental laws and regulations.

After considerable review and evaluation, on August 20, 2009, the Department issued a Presidential Permit to Enbridge Energy, Limited Partnership for the Alberta Clipper pipeline. In evaluating the Enbridge application, the Department worked in consultation with all relevant agencies and parties and with extensive public and stakeholder participation and outreach.

The Department found that the addition of crude oil pipeline capacity between Canada and the United States will advance a number of strategic interests of the United States. These included increasing the diversity of available supplies among the United States’ worldwide crude oil sources in a time of considerable political tension in other major oil producing countries and regions; shortening the transportation pathway for crude oil supplies; and increasing crude oil supplies from a major non-Organization of Petroleum Exporting Countries producer. Canada is a stable and reliable ally and trading partner of the United States, with which we have free trade agreements which augment the security of this energy supply.

Approval of the permit sends a positive economic signal, in a difficult economic period, about the future reliability and availability of a portion of United States’ energy imports, and in the immediate term, this shovel-ready project will provide construction jobs for workers in the United States.

The National Interest Determination took many factors into account, including greenhouse gas emissions. The administration believes the reduction of greenhouse gas emissions are best addressed through each country’s robust domestic policies and a strong international agreement.

The United States is taking unprecedented steps at home to transform how we produce and consume energy. The president is committed to reducing overall emissions and leading the global transition to a low-carbon economy.

The rest of the president’s lauding of this “shovel-ready” project here.


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